Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The reason loan origination is being dealt with in a different way to property is that Ireland in both its domestic legislation and double tax treaties maintains the right to tax land in the State. Loans which derive their value from land in the State are an interest in land, so we also maintain the right to tax profits associated with these loans. We do not maintain the same taxing rights over loans that derive their value from other sources, for example, a business within the State. As I touched on earlier, loan origination involves a section 110 company which is fronting for a foreign bank and lending directly to larger borrowers, etc. If that bank is established in a country with which we have signed a double taxation treaty, no Irish tax would have arisen on its interest income had it lent directly to the Irish borrowers. As the original creditor, there can therefore be no taxable capital gain on any subsequent sale of the loans.

On Deputy Paul Murphy's question on the yield, the figure we had provided for in budget 2017 was €50 million. Given the year is not yet complete, I cannot give an indication now on whether we will meet that figure but my expectation is that we will meet it and possibly exceed it. However, I will be able to answer the question early in 2018.